GR 181235; (July, 2009) (Digest)
G.R. No. 181235 ; July 22, 2009
BANCO DE ORO-EPCI, INC. (formerly Equitable PCI Bank), Petitioner, vs. JOHN TANSIPEK, Respondent.
FACTS
J.O. Construction, Inc. (JOCI) filed a complaint against Philippine Commercial and Industrial Bank (PCIB, petitioner’s predecessor) for allowing its authorized collector, respondent John Tansipek, to deposit a crossed check payable solely to JOCI into his personal account. PCIB defended its action by presenting a board resolution from JOCI, allegedly shown by Tansipek, authorizing such deposits. The Regional Trial Court (RTC) ruled in favor of JOCI, ordering PCIB to pay the check amount. It also granted PCIB’s third-party complaint, ordering Tansipek to reimburse PCIB for any amounts paid to JOCI. Tansipek was declared in default on the third-party complaint for failing to file an answer.
Tansipek challenged the default order via a Petition for Certiorari with the Court of Appeals (CA), which was dismissed for procedural deficiencies. He then appealed the RTC’s main decision on the third-party complaint to the CA. The CA reversed the RTC, absolving Tansipek from liability. The CA held that the default order was invalid because Tansipek had filed a motion for extension to file an answer, which the RTC did not act upon. The CA ruled that the RTC’s failure to resolve this motion rendered the subsequent default order void.
ISSUE
Whether the Court of Appeals erred in nullifying the default order against respondent Tansipek and consequently absolving him from liability to reimburse the petitioner bank.
RULING
Yes, the Court of Appeals erred. The Supreme Court reversed the CA and reinstated the RTC decision. The legal logic is anchored on the finality of judgments and the doctrine of immutability. Tansipek’s separate Petition for Certiorari assailing the default order was dismissed by the CA for failure to attach the requisite documents and for filing an untimely motion for reconsideration. This dismissal became final and executory. Consequently, the validity of the default order can no longer be relitigated in his subsequent appeal of the main decision.
The Court emphasized that a party declared in default retains the right to appeal the judgment on the merits. However, such an appeal must be based on the evidence presented and the substantive correctness of the decision, not on a collateral attack against the default order whose validity has already been conclusively settled by a final ruling in a prior proceeding. To allow Tansipek to challenge the default order again in his appeal would violate the principle of finality and put a premium on his own procedural negligence in the earlier certiorari case. Therefore, the default order stands, and the RTC’s judgment holding Tansipek liable to reimburse the bank is valid.